Monday, August 7, 2017

First Gen still interested in LNG ‘megaproject’

FIRST GEN Corp. remains keen on working with state-led Philippine National Oil Co. (PNOC) to build an integrated liquefied natural gas (LNG) project after the government said it is open to accepting unsolicited proposals for the facility.

First Gen President and Chief Operating Officer Francis Giles B. Puno told reporters last week the Lopez-led company is “excited” about the $2-billion LNG project.

“We will continue to pursue it... We will be interested,” Mr. Puno told reporters last week.

Energy Secretary Alfonso G. Cusi, who chairs the board of PNOC, told reporters last week the government will open the project to unsolicited proposals. The PNOC, which was evaluating offers from six countries, missed a target to forward a recommendation to the Department of Energy (DoE) by the end of July.

The PNOC has received proposals from China, Japan, South Korea, Indonesia, Singapore and the United Arab Emirates.

Before the LNG facility became a government-to-government project, the PNOC has been swamped with unsolicited proposals from 55 domestic and foreign entities.

In the past, First Gen, along with Phinma Energy Corp. and Shell companies in the Philippines, had expressed plans to put up an LNG facility.

First Gen had even offered 40% of its proposed $1-billion LNG regasification terminal in Batangas to prospective investors. The company has several plants running on natural gas, mostly sourced from the Malampaya gas find.

The LNG “megaproject” has several components, including gas storage facility with a capacity of five million tons per annum (MTPA) and a power plant with an initial capacity of 200 megawatts (MW) but scalable to 1,000 MW.

In June, Mr. Cusi said the DoE was planning the construction of a common receiving and distribution infrastructure for LNG, considered the “cleanest” of all fossil fuels, that is aimed at making the country a hub for the energy resource in Southeast Asia. The facility is planned for a property in Batangas owned by PNOC.

Mr. Cusi previously said the facility would cost around P100 billion and targeted for completion by 2020, which should give the country enough lead time ahead of the anticipated depletion of the Malampaya natural gas find starting in 2024. The offshore Palawan platform supplies gas to several power plants in Batangas. It powers up to 20% of the country’s electricity requirements.

The DoE is sticking to its target of breaking ground on the LNG project in 2018 despite the delay.